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  • Economy

Mauritius - Economy

KEY FACTS 2006

  • GNI: US$6.9bn
  • GNI p c: US$5,450
  • GDP growth: 4.1% p.a. 2003–07
  • Inflation: 6.0% p.a. 2003–07
  • Aid: 0.3% of GNI (2006)
  • External debt PV: US$2.0bn (2006)

Overview: Mauritius has a very good record of growth. Despite the country’s isolation from major world markets, it is among the most successful of small developing countries in diversifying its economy out of dependence on one agricultural commodity (sugar) into manufacturing, tourism and, latterly, financial services and ICT. Manufacturing (centred on the early established export processing zones, or EPZs) and tourism have developed rapidly, providing jobs and income. Manufacturing output grew by 10.4% p.a. 1980–90 and 5.0% p.a. 1990–2004.

By the late 1990s the textile industry was facing stiffer competition from new low-cost producers as well as the erosion of preferential tariff agreements. The government embarked on a programme of privatisation, financial market liberalisation and development of offshore activities, with the aim of turning the island into an international financial and business services centre. By 2005 financial and business services contributed 20% of GDP.

Sugar continued to contribute significantly to export earnings and the economy remained vulnerable to fluctuations in world commodity prices and bad weather. It is difficult to reduce imports in lean years since both the manufacturing and tourism industries are import-intensive.

The economy grew steadily during the 2000s, though more slowly than in the 1990s, more strongly in 2004 and 2005 (4.6%); growth was 3.5% in 2006 and 4.7% in 2007, reflecting the higher levels of foreign investment.

Trade: Exports of goods and services account for 56% of GDP and manufactured exports for 71% of total merchandise exports (2004). Main exports are EPZ manufactures (especially clothing and textiles), sugar, molasses, tea, cut flowers and foliage. Main imports are capital and consumer goods, food and chemicals. Main export markets are the UK (30%), France and the USA; main import markets are South Africa, France and India.

Mauritius signed an interim Economic Partnership Agreement with the EU in 2007, on goods-only free-trade with EU countries.